USD/JPY Surpasses 135.00 Amidst Dovish BoJ Minutes; Biden-McCarthy Meeting In Focus

During the Asian session, the USD/JPY pair soared above the crucial resistance level of 135.00. Amid the publication of the dovish minutes from the Bank of Japan's (BoJ) April monetary policy meeting, buyers have focused on the asset.

Members of the Bank of Japan supported the continuation of policy easing to attain stable inflation. Members of the Bank of Japan expressed, while discussing an exit from ultra-dovish policy, that the central bank should first evaluate the risk associated with the policy shift stance. One member, however, suggested that the BoJ should prioritize the risk of missing the price target due to a premature policy shift over the risk of altering policy too late.

During the Asian session, S&P500 futures are exhibiting erratic price action. On Friday, US equities were the talk of the town as investors ignored concerns about the US banking crisis and the debt ceiling and instead focused on optimism inspired by expectations of a policy-tightening hiatus by the Federal Reserve (Fed). The overall market sentiment is optimistic, with risk-sensitive assets gaining traction.

After a brief recovery, the US Dollar Index (DXY) has retreated to near 101.33 as investors fret over the outcome of Tuesday's scheduled meeting between US President Joe Biden, Speaker Kevin McCarthy, and other congressional leaders. A delay in extending the US debt ceiling is anticipated to result in the loss of millions of jobs and economic output, necessitating negotiations between delegates. In addition, a failure by the US Treasury to make required payments would impact the long-term outlook for the US economy.

Reuters reported that Scope Ratings has placed under review for a potential downgrade the United States' AA long-term issuer and senior unsecured debt ratings in local and foreign currency due to longer-term risks associated with the misuse of the debt ceiling instrument.